Jay Clint Tomlinson of New York New York a stockbroker currently registered with RF Lafferty Co. Inc. has been fined $7,500.00 and suspended for three months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based on findings that he effected trades in customer accounts without authorization. Letter of Acceptance Waiver and Consent No. 2016047634502 (Dec. 11, 2020).
According to the AWC, Tomlinson implemented a trading strategy in three RF Lafferty customer accounts where he executed frequent trades of pharmaceutical stocks. The strategy was previously used for customer accounts by an advisor who had discretionary authority in those customers’ accounts.
None of the customers authorized Tomlinson to trade on a discretionary basis in their accounts. Tomlinson failed to get discretionary trading approval from RF Lafferty. FINRA also noted that the stockbroker was under heightened supervision which prohibited him from exercising discretion in customer accounts. Tomlinson took in commissions for the prohibited transactions.
The AWC stated that 379 trades were placed by Tomlinson on a discretionary basis. In most cases, the stockbroker bought and sold securities in customer accounts on the same day. In some cases, Tomlinson traded the same security multiple times per day. At no point did Tomlinson ask customers to provide him with written authorization for trading the way that he did in their accounts. Instead, Tomlinson made trades on his own initiative and told customers about them afterwards.
FINRA found that the stockbroker’s conduct was violative of FINRA Rules 2010 and National Association of Securities Dealers (NASD) Rule 2510(b).
Tomlinson also caused RF Lafferty to maintain inaccurate records for the 379 trades that had been effected by him. The stockbroker did not mark trades as discretionary and in at least 14 circumstances, he mismarked trades as unsolicited. Tomlinson caused RF Lafferty to hold inaccurate records in violation of Securities Exchange Act of 1934 Section 17. His mismarking of order tickets was violative of FINRA Rule 4511.
This is not the first time that Tomlinson has been sanctioned by FINRA. He was fined $7,500.00 and suspended for one month by FINRA supported by findings that while he was associated with Bromberg Co. as Chief Compliance Officer, he did not timely reply to FINRA’s investigatory requests. Tomlinson was asked by FINRA for information and documents relating to supervisory procedures, unregistered offerings, and commissions for transactions executed at Bromberg Co. His failure to timely comply with these requests constituted the violation of FINRA Rules 2010 and 8210. His license was temporarily revoked by the regulator for non-compliance.
FINRA Public Disclosure confirms that on February 27, 2017, a customer initiated investment related complaint concerning Tomlinson’s conduct was settled for $36,000.00 in damages based upon allegations that Tomlinson placed the RF Lafferty customer in options and stocks which poorly performed.
Tomlinson has been registered with RF Lafferty since April 19, 2013.
